Wed | Jan 16, 2019

Pension membership declines but assets grow to $331 billion

Published:Wednesday | March 11, 2015 | 12:00 AM

The winding-up of pension plans contributed to a four per cent decline in active membership in the September 2014 quarter, according to the latest Financial Services Commission (FSC) data.

Approximately 4,000 dropped off the private pension plan rolls in the quarter, the first decline seen since March 2013, according to the FSC.

Total enrolment fell to 102,105 members.

The FSC, which releases quarterly data on the sectors it oversees through its newsletter, the FSC Compass, said the employed workforce also contracted during the quarter, and was partially responsible for the reduction in pension coverage, which dipped marginally to 8.42 per cent.

At the close of September, the private pension market had 806 pension plans with assets totalling $331.56 billion, representing a two per cent increase over the previous quarter and 9.45 per cent year-on-year. Just over half, 432 plans, were classified as active.

With regard to how assets are invested, the FSC said that direct holdings of securities issued by governments comprised 42 per cent.

Investment arrangements

Investment arrangements, which include pooled funds and deposit administration contracts, are significantly invested in government securities, which totalled 30 per cent of all investments.

Investments in repurchase agreements declined by around per cent to $26.16 billion, reversing the growth experienced in the first half of the year, the FSC said.

Bonds and debentures continued climbing, rising by 18 per cent to $4.8 billion.

Direct holdings of stocks and shares valued $30.54 billion, represented approximately nine per cent of total invested assets.

Of the 432 active pension plans, 324 were classified as defined-contribution schemes, but the regulator notes that defined-benefit plans accounted for the majority of the pension industry assets.

At September 2014, some 412 plans had submitted solvency data to the FSC, which noted that 92 per cent of the plans that submitted data were found to be solvent.